The Bahraini government has launched major development projects in the infrastructure and transportation sectors. Under phase one of the Bahrain International Airport (BIA) Modernization Program, the New Aiport Passenger Terminal, which opened in January 2021, increased BIA’s annual passenger capacity from 8 million to 14 million travelers, and expanded cargo handling capacity to 1 million metric tons per year. A number of significant projects are planned for subsequent phases of development.
The Bahrain Metro Project, introduced during a global market consultation event in March 2021 and estimated at $2 billion, will cover 109 km with four transit lines and 20 passenger stations through a four-phase, seven year implementation plan. The King Hamad Causeway, which may start construction work in 2024 and cost $4 billion, will link Bahrain and Saudi Arabia and boost overland access to Saudi Arabia and the wider GCC market through a new four-lane highway and two passenger and cargo rail lines.
Other critical infrastructure projects are moving forward, including development of the U.S. Trade Zone, a site for light manufacturing and logistics operations adjacent to the Khalifa Bin Salman Port in Al-Hidd, as well as expanding roads to less-developed parts of the country and connecting all citizens to Bahrain’s national fiber optic network.
In the short-term, the development and commercialization of several additional conventional oil and gas finds represent major opportunities for U.S. oil companies that provide production, transportation, refining, and other services. The Bahraini government’s plans to expand and upgrade petrochemical production lines at state-owned enterprises, including Gulf Petrochemicals Industries Company (GPIC) and Bahrain Petroleum Company (BAPCO), are underway. In May 2019, the Bahraini government completed construction of an LNG import terminal, and in February 2020, the terminal was commissioned.
The non-petroleum sector of Bahrain’s economy continued to grow at rates above historic trends. Growth areas include: tourism, logistics, financial services, telecommunications and digital economy, and the industrial sector and energy, including oil and gas.
Migration to digital technologies became an essential business practice during the coronavirus pandemic and public and private sector demand for virtual communication, e-learning, big data analytics, artificial intelligence, and cloud based products and services remains strong. In accordance with Law No. (56) of 2018, concerning the provision of cloud computing services to foreign parties, the Kingdom of Bahrain has granted the United States sovereignty over the data held by U.S companies in Bahrain-based data centers. The government of Bahrain continues to pursue implement similar agreements with countries around the world.
The national healthcare system meets the overall needs of the country’s total population but opportunities exist, especially as Bahrain’s health sector remains a popular destination for American-made medical devices and technology, and Bahrainis are eager to expand exchanges between universities and research institutes and training opportunities for healthcare specialists. The normalization of diplomatic ties with Israel offers additional opportunities for technical exchanges and scientific training. A number of large-scale health sector infrastructure projects are underway, including the construction of the $300 million King Abdullah Medical City Hospital In March 2023, Bahrain Pharma was the first facility to begin manufacturing pharmaceutical products in Bahrain. The $70 million King Hamad American Mission Hospital opened in early 2023 and formalized a partnership with a major U.S. hospital network.
Financial technologies (FinTech) is also a growing sector in Bahrain. As part of the Bahraini government’s push to reinforce its position as a regional financial center, the Bahrain Economic Development Board and Singapore’s FinTech Consortium inaugurated a leading MENA FinTech hub, Bahrain FinTech Bay, in 2018. Bahrain maintains a forward-leaning FinTech regulatory environnment and was the first MENA country to license a cryptocurrency exchange in 2019 and hosts companies involved in digital banking, e-wallets, blockchain, smart contracts, artificial intelligence, risk management, and other FinTech specializations. Since 2018, the Central Bank of Bahrain has fostered FinTech startups in its regulatory sandbox, including cryptocurrency exchange Rain Financial which raised $110 million in funding from Silicon Valley investors in January 2022.
Companies that produce qualifying manufactured products in Bahrain can access GCC markets duty free under the GCC Customs Union.